Supreme Court may toss an 'important tool' for regulating climate change

The Supreme Court is on the verge of restricting the Environmental Protection Agency’s ability to limit carbon dioxide emissions from power plants.

The court’s conservative majority appears likely to side with Republican-controlled states and coal companies in West Virginia v. EPA, for which the court heard oral arguments on Feb. 28 and is expected to issue a ruling in June. Such a ruling could eliminate some of the key methods that the Biden administration can use to accelerate the power sector’s transition to cleaner sources of energy, potentially hamstringing its ability to meet the president’s goal of halving greenhouse gas emissions by 2030.

Experts say the court is virtually guaranteed to side with the petitioners — a coalition of red states and coal companies — but that the still unknown logic and details of the ruling may determine the shape of U.S. climate regulation in the future.

Joe Biden
President Biden speaking in Greensboro, N.C., on Thursday. (Mandel Ngan/AFP via Getty Images) (AFP via Getty Images)

“Taking the case is a very clear sign that they’re going to rule against EPA in some way, but we don’t know how," David Doniger, senior strategic director of the Climate & Clean Energy Program at the Natural Resources Defense Council, told Yahoo News. “It wasn’t clear from the oral argument what the dominant approach would be.”

Observers do not expect the Supreme Court to overturn previous rulings that give the EPA authority to regulate carbon pollution, but they say it’s possible the court may say the agency cannot use certain tools in doing so.

“It’s about how [and] what kind of regulation EPA can put in place,” Doniger said.

“From the oral argument, it looks like the Supreme Court is likely to rule in favor of the petitioners, but it could be a broad ruling or a narrow ruling,” Jeff Holmstead, who heads the Environmental Strategies Group at the law firm Bracewell, told Yahoo News. “Most of us who have been following the cases for a while suspect that their reasoning will set some limits on EPA’s authority to regulate carbon dioxide emissions — not just from power plants but from industrial plants more generally.”

To understand how the case reached this point, it’s necessary to go back to 2007, when the Supreme Court ruled 5-4 in Massachusetts v. EPA that the agency is obligated to regulate carbon dioxide as a pollutant under the Clean Air Act. But the EPA did not write any regulations of carbon emissions under then-President George W. Bush.

Barack Obama
Then-President Barack Obama speaking at the largest photovoltaic solar plant in the U.S., in Boulder City, Nev., in 2012. (Ethan Miller/Getty Images) (Getty Images)

When President Barack Obama took office, he focused on trying to get Congress to pass a bill to regulate carbon emissions across the economy, which would have displaced the EPA’s regulatory authority. After unified Republican opposition blocked that effort in the Senate, the EPA drafted regulations, which were finalized in 2015 under the rubric Clean Power Plan.

The rules for new power plants essentially required such low emissions that no new coal-fired power plants would be built unless they included technology to remove carbon dioxide from the smokestack and store it underground. This is an expensive practice known as carbon capture and sequestration, or CCS. Since gas-fired power plants and renewable sources of energy — such as wind and solar — are cheaper than coal when starting from scratch, that rule actually made little difference.

The more contentious question is how to regulate existing power plants, which may be active for decades to come. The Clean Power Plan answered that with an innovative approach to gradually reducing emissions: Instead of just requiring new pollution controls like CCS, it set limits for the emissions of a state’s entire energy portfolio that could be met through approaches like buying solar and wind power produced elsewhere or reducing demand for electricity by helping consumers weatherize their homes. In the parlance of energy policy wonks, these tactics are called “outside the fence line” of a power plant.

Coal-friendly states sued, arguing that this approach went beyond the EPA’s power under the Clean Air Act, and the Supreme Court stayed the rule in 2016. The Democrats then lost the White House that year to Donald Trump, a climate science denier and coal industry booster. In 2017, Trump’s EPA — arguing that “outside the fence line” rules go beyond the agency’s authority — revoked the Clean Power Plan and replaced it with a regulation called the Affordable Clean Energy (ACE) rule, which eliminated those measures and actually could allow for more carbon pollution by changing the way it is calculated.

Dan Brouillette, Andrew Wheeler, Mick Mulvaney and Mary Neumayr
EPA Administrator Andrew Wheeler prepares to sign the Affordable Clean Energy rule in June 2019 as Deputy Energy Secretary Dan Brouillette, acting White House chief of staff Mick Mulvaney and Council on Environmental Quality chairman Mary Neumayr look on. (Al Drago/Bloomberg via Getty Images) (Bloomberg)

A group of Democratic-controlled states sued to block the Trump-era ACE rule, arguing that the EPA was wrong to determine that only very modest pollution-control technology additions at power plants could be required. Last year, the United States Court of Appeals for the District of Columbia Circuit agreed and overturned the ACE rule, and the conservative state and coal industry challenges to that ruling are what the Supreme Court is now considering.

So, experts say, the court is likely to overturn that decision and find that the Trump rule was valid. But doing that and nothing else would merely signal to future Republican administrations that they can get away with writing toothless carbon regulations; it wouldn’t stop Biden’s EPA from devising a much stronger one.

A broader decision could have a broader impact, though: If the court holds that the federal government lacks the authority to require lowering emissions through anything but pollution control technology, the Biden administration will not be able to write a new rule that includes other approaches.

“The oral argument was focused almost exclusively on the legality of the Clean Power Plan and whether the EPA in the Clean Power Plan exceeded its authority by what its opponents have termed the ‘beyond the fence line’ generation-shifting feature of it,” Richard Revesz, a professor at New York University School of Law, told Yahoo News.

And so the future of climate regulation hangs in the balance.

EPA Administrator Michael Regan indicated two weeks ago that “the EPA is waiting for the Supreme Court decision to guide what it would like,” Revesz noted.

The Supreme Court
The Supreme Court. (Kent Nishimura/Los Angeles Times via Getty Images) (Los Angeles Times via Getty Imag)

If the court rules that “outside the fence line” rules are not allowed, “it’s a significant constraint on EPA’s ability to regulate the greenhouse gas emissions of existing power plants,” Revesz said.

“You’re taking an important tool out of the EPA’s toolkit,” he added. “It might ultimately affect the stringency of the rule, and if it doesn’t affect the stringency of the rule, it might end up being more costly.” That’s because the only way to require similarly significant emissions cuts is by requiring carbon capture and sequestration.

“It will have lost the ability to get significant reductions that are low-cost,” Revesz said. That’s why most energy utilities actually supported the EPA in this case.

The upcoming ruling and subsequent power plant regulations are central to Biden’s climate legacy because it increasingly appears that he will not be getting major action to address climate change through Congress. Since Biden’s sweeping Build Back Better legislation — which includes large investments in clean energy and electric vehicles — has failed to pass the Senate, his administration has argued that the United States can still meet its pledges to reduce greenhouse gas emissions. At the U.N. Climate Change Conference last November, special presidential envoy for climate John Kerry told reporters that “we’re not dependent on the schedule of Congress” because “we’re already doing” what needs to be done on climate change through executive action.

The expected Supreme Court ruling against the EPA will follow a string of rulings limiting environmental regulations. Earlier this month, the court overturned a lower court ruling that had struck down a Trump-era rule limiting state and tribal authority to veto projects such as pipelines that could pollute their waters.

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